Corrections Corp. of America, the largest operator of private prisons in the U.S., is in the third year of a four-year project to upgrade its phone infrastructure—which comprises 8,000 phones at 40 company-owned facilities—to Avaya voice-over-IP systems.

A key driver: to give CCA's central information-technology operations group the ability to manage phone switches from headquarters in Nashville, Tenn., says Brad Wood, senior director of enterprise technology operations. Most CCA prisons are in remote areas; a routine administrative task might require dispatching a technician on a six-hour round trip. "That's an expensive trip to add an extension," Wood says. As a result, "Our facilities would wait, and wait, and wait until they needed something done—or until something broke."

Which leads to another justification for the project: Many of CCA's phone switches are old and prone to outages. "The current technology we have in the field is 15 to 20 years old," Wood says. "It's a natural progression for us to migrate to the new technology."

2. Outsourcing

AVERAGE SPENDING:$8.22M

WHAT IT IS:Services for managing a company's information-technology or business-process functions.

In 2006, there's not likely to be a deal bigger than General Motors' announcement in February that it would split information-technology outsourcing contracts—worth an estimated $15 billion over the next five years—among six suppliers: EDS, Capgemini, Hewlett-Packard, IBM, Compuware's Covisint subsidiary and Wipro.

Bobby Cameron, a principal for I.T. management at Forrester Research, sees GM's move as a "definitive tipping point" in the trend of companies soliciting outsourcing bids using the standardized Information Technology Infrastructure Library descriptions, a set of definitions developed by the British government for information-technology services. "That starts to allow more apples-to-apples comparison across suppliers," he says.

Meanwhile, Hudson's Bay Co., Canada's largest department store chain, has used outsourcing more selectively: Last year, it entered a five-year deal with IBM to design and host an e-commerce site selling apparel for Canada's national teams competing in the 2006 Olympic Winter Games.

HBC signed the deal to sell the Olympic merchandise in early 2005 and needed the site to go live by November. "We didn't have the internal capacity or the resources to build the application as fast as we needed," says interim CIO Paul Bellack. "It would have been hugely embarrassing if it had been time to sell Olympic gear and we weren't ready." By farming out the project to IBM, he says, the company met its deadline.

This summer, the Texas Advanced Computing Center expects to turn on 50 new high-speed networking switches as part of a major upgrade to its Lonestar supercomputing cluster.

TACC, at the University of Texas at Austin, provides the infrastructure for researchers across the country, who conduct everything from climate and weather modeling to astrophysics simulations. "We have to support a ridiculous range of applications," says Karl Schulz, manager of the center's high-performance computing group.

Schulz is leading TACC's project to convert Lonestar from 512 standalone servers to a 1,024-processor blade-server system from Dell, running Linux operating systems. To let all of those processors communicate as if they were one gigantic system, TACC needs a very high-speed, low-latency network, so it will adopt InfiniBand, a networking standard supported by IBM, Hewlett-Packard, Dell and others, to replace a proprietary cluster-interconnection system.

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The InfiniBand switches, supplied by Topspin Communications (acquired by Cisco Systems last year), can transfer at least 450 million bytes per second, more than twice the bandwidth in the existing cluster, Schulz says. For high-performance computing, Schulz says, "InfiniBand is looking like the way to go—it's a standard, and a lot of people are moving to it."

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